NTPC misleading the govt on gas price: RIL

NTPC misleading the govt on gas price: RIL

New Delhi: Mukesh Ambani-led RIL on Thursday hit at state owned NTPC for “misleading" the government by saying that it was not aware of the condition that the price of gas to be supplied to it was subject to Centre’s approval.

“...NTPC’s letter to the government at this stage is clearly an afterthought intended to mislead the government," director on RIL board and head of Petroleum Business PMS Prasad told petroleum secretary R S Pandey in a communication amid an ongoing battle with the power PSU over gas supply on a price bid in 2004.

The letter comes days after the government made it clear that the empowered group of ministers approved price of $4.2 per mmBtu for RIL’s KG basin gas was without prejudice to the ongoing legal battle, where NTPC is seeking the fuel at a committed price of $2.34 per mmBtu.

Prasad said “the fact is that NTPC was not only aware of the requirement of gas price approval under the Production Sharing Contract but had in fact insisted upon and agreed to its inclusion as a condition precedent to the gas supply agreement."

He was referring to the reports that NTPC chairman R S Sharma had written to the government that “RIL did not convey to NTPC that the price of gas quoted by RIL in the international competitive bidding was subject to approval of the government under the PSC."

Sharma did not take calls made for his comments.

Listing out over half a dozen instances in various agreements to assert that the state power major was aware of and agreed to the price being subject to the government approval, Prasad said if the NTPC chairman was denying knowledge of this, nothing can be farther from the truth.

NTPC is actively pursuing a case for moving the Supreme Court on the issue, as RIL has recently got its petition approved in the Bombay high court stating that government’s policy on pricing of gas would frustrate the contract.

RIL further said that during the entire period of 16 months of negotiations of GSPA with NTPC, the issue of government gas price approval was never objected to by NTPC.

On the contrary, NTPC themselves had referred to the requirements for such government approval, Prasad said.

In the letter, a copy of which was also marked to power secretary H S Brahma, RIL said that having signed the PSC with the government in April 2000, it was well aware of the provisions and the requirements relating to the government approval for the price.

“This position had accordingly been conveyed by RIL to NTPC in no unambiguous terms," RIL said.

“... What is pertinent is that obtaining of such approvals was applicable to both RIL and NTPC and waiver of any condition precedent was possible only by mutual agreement of both parties," it added.

“Even when NTPC has approached the Bombay high court in 2005, as evinced by the proceedings, the fact that government approval was required" prior to the sale of gas remains a position accepted by both parties, Prasad said.